I’ve got a very interesting email from one of you guys, and I’ve decided to share my response here. This is the email.
Among the three (FAMI, PAMI & PEMI), which do you think is the best? Please also take into consideration the costs involved, such as entry, exit fees, sales load, etc. Currently, I have direct investments in stocks, I’m thinking of diversifying through MF. Thanks and God Bless.
First of all, I think I’m blessed having an opportunity to be answering questions from my readers, and hopefully, I’ve enlightened you guys, one way or another. Thank you for keeping my inbox busy.
I would want to answer your question with a few introduction.
“Best” is a subjective description that can be interpreted differently by different ears (or eyes) hearing or reading it. It’s like choosing our girlfriend, wife, friends, or even work. We know we have chosen the best, but we are not pointing at the same persons, are we?
The point being is that we have different considerations in choosing the best. All we have to do is identify those factors and considerations.
The question is specific though. You’re asking what is the best mutual fund for “me”, making my intro irrelevant. Darn!
Alright, another thing. I just want us to be on the same track before I answer your question.
Sales load are fees paid by an investor in investing in mutual funds. There are several types. There are funds that charge sales load upon purchase of investment. These are what we call entry fees. There are also funds that charge sales load upon redemption. These are called exit fees.
And lastly, the common practice among the three Mutual Fund Management Companies that you have mentioned, are the type of funds that charge both entry fees and exit fees. However, on these types of funds, the exit fees will be charged only when you redeem your investment during a certain period called holding period. But when redemption is done after the holding period, no exit fee will be charged.
Among the three (FAMI, PAMI & PEMI), which do you think is the best?
I chose funds managed by First Metro Asset Management, Inc. (FAMI), and, as I have said earlier, I have my unique considerations in choosing such. Let me share you my top 3.
- Convenience. It will be unquestionable. Being part of the Metrobank Group, reaching and applying for FAMI Save & Learn account is as easy as opening a bank account to any Metrobank branch. All you have to do is visit any branch, and voila, you’re good to go.But that’s not all, I’m just starting. What I’m really enjoying is that you can easily make additional investments through Metrobank’s Internet Banking service (Metrobankdirect). If you’re doing money cost averaging, you can actually set scheduled payments/investments to make sure you won’t forget a thing.
- Low Sales Load. Among the three, FAMI charges the lowest sales load of 2% on minimum investment.
- Performance. FAMI is one of the top performing Mutual Fund Management Company here in the Philippines. It actually doesn’t matter to me if they’re number one or not. For the past five years, they have been performing very well.Although, it is very important to note that one of the best performance consideration is to look on how particular funds perform on the bad years. This will show the maturity and capability of the fund managers.
That’s it. Please do note that your risk profile is one of the most important consideration in investing. Considering a mutual fund reaching the top on performance, a great possibility also exist that the same mutual fund will make the highest lost on bad times. There is always a trade-off on risks and rewards, don’t forget.
And again, what’s best for me, may not always be best for you. Just a friendly reminder
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